Water companies will remain in focus this week as investors also prepare for results from retailers Carphone Warehouse and Halfords.

The potential sale of waste-disposal business Biffa will be among areas of interest when Severn Trent announces its full-year figures on Tuesday.

In April new chief executive Colin Matthews said he planned to sell the £1 billion-rated business. Any demerger will test investor appetite for the £7 billion UK waste industry, which has changed markedly since Government sought to divert rubbish from landfill to higher-value environmentally sound treatment methods.

There will also be questions over the performance of Severn's regulated business.

Ofwat reprimanded Severn Trent in March after it emerged that income data submitted to the regulator for a price review turned out to be incorrect and resulted in bills being inflated.

A financial penalty will only be known once an ongoing investigation by the Serious Fraud Office into reliability of leakage data is known. In the meantime Severn has begun the process of refunding customers.

Merrill Lynch said the higher bills permitted by Ofwat at the start of the five-year regulatory period would leave profits at £412 million at Severn Trent Water, compared with £306 million a year earlier. Operating profits for the group are expected to be £498 million, up 26 per cent.

Redditch-based bicycle and car parts retailer Halfords has signalled to the City that pre-tax profits on Thursday should come in at around £77 million - progress on the £75 million it made last year.

In a trading update in April, chief executive Ian McLeod said weakening consumer confidence and a sluggish UK economy posed challenges, but indicated Halfords was able to defend sales more easily than other retailers.

There was evidence that motorists were spending more on repairs and fitting new technology into their current cars rather than buying new vehicles with the equipment already installed, he said.

Analysts point out that satellite navigation systems have gone from being immaterial to more than six per cent of Halfords' sales.

Morgan Stanley estimated Sat Nav boosted profits by £8 million last year and will add a further £5 million to profits this year.

The firm, which sells every third bicycle in the UK, has more than 400 stores and employs nearly 10,000 staff.

C arphone Warehouse announces full year results on Tuesday with investors eager to see how many customers have taken up its offer of free broadband through its Talk